Reimburse Employee on Paycheck for Expense
These instructions are for a situation where an employee spends their own out-of-pocket money for a buinsess expense and they need to be reimbursed on a paycheck.
- From the Payroll Command Center select the blue button for Payroll Categories.
- Select the Deductions tab at the top.
- Click New and set up a deduction called Employee Expense Reimbursement.
- In the Linked Payable Account field, enter the expense account that you want to use.
- If you need to create a new account to track expense reimbursements, click the New button in the account "Select From List" window and then enter the appropriate information for that expense.
- A message will appear informing you that the account for deductions withheld is usually a liability account. Click OK.
- In the Type of Deduction section of the window, select User-Entered Amount per Pay Period.
- In the Deduction Limit section set it to No Limit.
- Click on the Employees button, and put a check mark to the left of the applicable employees' names. Then click OK.
- Click on the Exempt button. Here you can check off your tax categories to mark this exempt from taxes, however you may want to confirm these options with your accountant.
- Click OK to close out of the Deduction window.
- You are now ready to write a paycheck.
- While processing payroll in the Select & Edit Paychecks window click the arrow in the Edit column to edit the paycheck.
- On the check, in the Employee Expense Reimbursement line, enter the amount of the expense reimbursement as a Positive amount, even though the other deductions will be negative amounts.
- You should see the check amount increase as you are paying this expense back to the employee.
- Record the check.